Companies Act 2006 - PART 5
A COMPANY’S NAME
143. This Part applies to the name under which a company is registered, sometimes called the "corporate name". This Part regulates the choice of name. The rules are primarily intended to ensure that third parties are not misled. There are no property rights in companies’ registered names as such. While there is no requirement for a company to use its registered name in the course of business, this Part also requires a company to disclose its name in specified circumstances.
144. Sections 70 to 74 provide for the appointment of adjudicators in cases where there is dispute over the registering of a company name. Section 71 safeguards the independence of the adjudicators and section 74 provides a right of appeal to the court.
CHAPTER 1: GENERAL REQUIREMENTS
Section 53: Prohibited names
145. This section replaces section 26(1)(d) and (e) of the 1985 Act. It retains the existing prohibition of companies registering names that cannot be used without commission of an offence and of those that are offensive.
Section 54: Names suggesting connection with government or public authority
146. This section replaces section 26(2)(a) of the 1985 Act. It prevents a name being registered without the Secretary of State’s approval if it suggests a connection with Her Majesty’s Government, a local authority or – which represents a change from the 1985 Act – any part of the Scottish administration, or Her Majesty’s Government in Northern Ireland. A new power allows similar protection to be extended to other public authorities.
Section 55: Other sensitive words or expressions
147. This section replaces sections 26(2)(b), 29(1)(a) and 29(6) of the 1985 Act.
148. Subsection (1) requires prior approval for the adoption of a name that includes words or expressions specified in regulations. Subsection (2) provides for the procedure to be used for making the regulations. The words and expressions protected by the current Regulations (the Company and Business Names Regulations 1981, SI 1981/1685) include British, English, Scottish and Welsh; chamber of commerce, charity, Her Majesty, midwife, police, and university.
Section 56: Duty to seek comment of government department or other specified body
149. This section replaces section 29(1)(b) and (2) and (3) of the 1985 Act. It provides power for the Secretary of State to specify whose view must be sought when seeking approval for a name. For example, under the present Regulations, the approval of the General Dental Council is required for the use of either “dental” or “dentistry”. Regulations under the new power would be able to replicate this. They could also require the approval of, say, the House Authorities for names suggesting a connection with Parliament.
150. When a request is made under section 56 in connection with the registration or the change of name of a company, the registrar must be sent a statement that a request has been made, and a copy of the response (see subsections (3) and (4)). But the registrar must no make the response available for public inspections (see section 1087(1)(a)).
Section 57: Permitted characters etc
151. This section is a new provision. It provides power for regulations to specify what letters, symbols, etc may be used in a company’s registered name; the regulations may also specify a permitted format for a name (for example, to prevent the use of superscript or subscript).
CHAPTER 2: INDICATIONS OF COMPANY TYPE OR LEGAL FORM
Section 58: Public limited companies
152. This section replaces section 25(1) of the 1985 Act (and also section 27(4)(b) and (d) in its application to public limited companies). It brings together in a single provision all the alternative statutory indicators of legal status that must be used by a public company as part of its registered name, i.e. “public limited company” or the Welsh equivalent or the specified abbreviations. This section does not apply to community interest companies.
Section 59: Private limited companies
153. This section replaces section 25(2) of the 1985 Act (and also section 27(4)(a) and (c) in its application to private limited companies). It brings together in a single provision all the alternative statutory indicators of legal status that must be used by a private company as part of its registered name, i.e. “limited” or the Welsh equivalent or the specified abbreviations. Certain companies are exempt (see section 61). This section does not apply to community interest companies.
Sections 60 to 62: Exemption from requirement as to use of “limited”
154. These sections replace section 30 of the 1985 Act. Section 30 exempts certain companies from the requirement for their names to conclude with “limited”. Exempt companies are also exempt under the 1985 Act from some of the requirements regarding publication of their name but they still have to disclose their limited status in correspondence. Those currently exempt are those with a licence granted under section 19 of the Companies Act 1948 which have delivered a statutory declaration to the Registrar that the company complies with the requirements for the exemption. These requirements are, in effect, that the company is non-profit-making and its objects are the promotion of commerce, art, science, education, religion, charity or any profession.
155. Section 60 continues the exemption for companies already exempt so long as they continue to meet the conditions and until they change their registered name. It also provides an exemption for charities and allows the Secretary of State to make regulations exempting other companies. Only private companies may be exempt
156. Sections 61 and 62, which replace section 30(2) and (3), specify the conditions that must be met for a company currently exempt to continue to qualify for the exemption: its objects must continue to satisfy the criteria for their exemption and its articles must both preclude distributions of dividends to its members and also, in the event of it being wound up, require its assets to be passed to a body with similar objects. For companies limited by shares benefiting from an exemption under the 1948 Act (or its Northern Irish equivalent), there is a new requirement that the articles prevent a distribution of capital. This is linked to the change in section 63(4) (see below).
Section 63: Exempt company: restriction on alteration of articles
157. This section replaces section 31(1) and (5). It prohibits a company benefiting from an exemption under the 1985 Act or the 1948 Act (or their Northern Irish equivalents) from changing its articles in such a way that it no longer meets the requirements for the exemption. It is an offence to change the company’s articles in such a way. Many companies with an exemption under the 1948 Act (or its Northern Irish equivalent) were made to include a provision in their memoranda preventing an amendment to their memoranda or articles without the consent of the Board of Trade (there were a number of variations on this theme). Subsections (4) and (5) make provision to remove this administrative burden.
Section 64: Power to direct change of name in case of company ceasing to be entitled to exemption
158. This section replaces section 31(2) to (6). It gives the Secretary of State power to withdraw a private company’s exemption from the requirement for its name to conclude with “limited” and to direct it to change its name if it no longer meets the criteria that applied when it was granted the exemption.
Section 65: Inappropriate use of indications of company type or legal form
159. This section replaces section 26(1)(a), (b), (bb) and (bbb) of the 1985 Act. These paragraphs restrict the use of various words, expressions and abbreviations that are indicators of legal status for various types of commercial entity, e.g. p.l.c., community interest company, open-ended investment company, etc. Some of the restrictions apply to the use of the particular indicator at the end of a company’s name; some anywhere other than the end of the name; and some anywhere in a company’s name.
160. This section provides power to make regulations prohibiting the inclusion in a company’s name of specified words, expressions and abbreviations. The only words etc that can be specified in the regulations are those associated with a particular type of company or form or organisation or those confusingly similar to such words and expressions. This section also provides power to require or prohibit the statutory indicators of legal status being used in conjunction with specified other words.
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